Do you have to pay employee reimbursements through payroll? I've seen bookkeepers pay travel allowance and reimbursements for various things straight from the bank and not through payroll. Can this be done?
Hiya @DaisyStell ๐
It all comes down to very precise terminology to correctly reference the legal obligations.
For example, you say reimbursements but then refer to travel allowances? See the ATO guidance on the difference between the two.
A true reimbursement is made when a business expense is incurred by your employee and they present you with the tax receipt so you can pay them to assume the expense as a business expense.
That's not at all what a travel allowance is, as per the ATO annual TD 2024/3.
At a minimum, you pay amounts in payroll that are "taxable", superable, reportable or otherwise related to income. You may also pay other amounts that aren't taxable, superable or reportable, but because you already have the bank details for the employee and it's convenient.
For example, if your employee pays for a taxi/uber when they are travelling for business and present you with the receipt so you can reimburse them, that could potentially just be paid via accounts payable. Many employers just have a code set up in payroll for "REIM-taxi fares" that isn't taxable, superable or reportable, but will appear on the payslip so there is a record of it.
To determine if it must be in payroll, you need to thoroughly understand your employment obligations with respect to tax, super and reporting ๐
Deanne
Hiya @DaisyStell ๐
It all comes down to very precise terminology to correctly reference the legal obligations.
For example, you say reimbursements but then refer to travel allowances? See the ATO guidance on the difference between the two.
A true reimbursement is made when a business expense is incurred by your employee and they present you with the tax receipt so you can pay them to assume the expense as a business expense.
That's not at all what a travel allowance is, as per the ATO annual TD 2024/3.
At a minimum, you pay amounts in payroll that are "taxable", superable, reportable or otherwise related to income. You may also pay other amounts that aren't taxable, superable or reportable, but because you already have the bank details for the employee and it's convenient.
For example, if your employee pays for a taxi/uber when they are travelling for business and present you with the receipt so you can reimburse them, that could potentially just be paid via accounts payable. Many employers just have a code set up in payroll for "REIM-taxi fares" that isn't taxable, superable or reportable, but will appear on the payslip so there is a record of it.
To determine if it must be in payroll, you need to thoroughly understand your employment obligations with respect to tax, super and reporting ๐
Deanne
20 June 2024 ยท 3 min read time
6 Feb 2026 ยท 4 min read time
15 Apr 2026 ยท 4 min read time
1,322 views
1 replies